Xxxxxxxxx Advisory Agreement
made as of the 17 day of February, 2000
BETWEEN Fullcom, Inc., a New Jersey corporation (the "Company") with
offices at 00 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx, Contessa Corporation, a
Delaware Corporation and Xxxxxxx Xxxxxxxxx ("Consultant"), an individual with
offices at 0000 Xxx Xxxxxx, Xxxxxxx, Xxxxx 00000.
WHEREAS Contessa Corporation ("Contessa") and the Company desire to merge
the Company with and into Contessa's wholly-owned subsidiary, Fullcomm
Acquisition Corp., whereby Acquisition shall be the surviving entity, and shall
change its name to Fullcomm, Inc. and whereby the transaction shall qualify as a
tax free exchange pursuant to Section 351 of the Internal Revenue Code ("IRC");
WHEREAS, in furtherance of such combination, the Boards of Directors
and/or shareholders of Contessa, Acquisition and the Company have each approved
the merger of Fullcomm with and into Acquisition (the "Merger"), upon the terms
and subject to the conditions set forth in the Merger Agreement and Plan of
Merger dated as of January 28, 2000 between the Company, Contessa, and certain
other parties (the "Merger Agreement"), in accordance with the applicable
provisions of the Delaware General Corporation Law (the "DGCL") and the New
Jersey Business Corporation Act (the "NJBCA").
WHEREAS, the Company Shareholders desire to exchange all of their
ownership interest in the Company for shares of Contessa common stock on the
basis set forth in Section 1.2(c) of the Merger Agreement and in the respective
amounts set forth in Schedule 1.2 thereto as a tax free exchange pursuant to
Section 351 of the IRC; and
WHEREAS, the execution of this Agreement is a condition to the Merger
taking place.
NOW THEREFORE, the parties hereto agree as follows:
1. Duties. Company agrees to engage Consultant to provide, and
Consultant agrees to provide, to the Company or to its designee,
advisory services relating to the marketing of computer hardware
security devices and strategic advisory services, all subject to the
terms and conditions contained herein.
2. No Consents or Conflicts. Consultant warrants to the Company that
Consultant is in a position to provide such services in accordance
with the provisions, and throughout the whole of the term, of this
Agreement without the consent of any other party.
3. Term. The engagement shall commence from the effectiveness of the
Merger referred to above and shall, subject to the provisions of
Section 10, continue for a period of two (2) years.
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4. Remuneration. Contessa shall issue to Consultant 175,000 shares of
common stock for its services to be issued immediately upon the
consummation of the Merger. Contessa and Consultant agree to take
all actions necessary to ensure that in a dilutive transaction
Consultant and the majority stockholders of Contessa at the time the
Merger is consummated ("Majority Stockholders") will be diluted
at the same proportionate rate and in any sale of substantially all
of the assets or the majority of the stock of Consultant and the
Majority Stockholders shall receive the same total compensation per
share for their shares of stock in Contessa. Further, Consultant and
the Majority Shareholders agree to enter into a shareholder's
agreement with mutually agreeable terms, including but not limited
to rights of first refusal.
5. Restricted Shares for Two (2) Years. It is understood and agreed
that the above shares will not have been registered and will be
"restricted" shares which are not freely tradeable, and may only be
sold if registered under the Securities Act of 1933, as amended and
appropriate "Blue Sky" provisions are observed. In addition, such
shares shall be, and hereby are, restricted, and there shall be no
transfer, pledge, or other alienation until two (2) years from the
effective date of the Merger, except under any right of first
refusal under a shareholders agreement.
6. Competition. Company and Contessa acknowledge that Consultant is
involved in companies and activities that compete in the marketplace
with the operations and technology of Company.
7. Non-Disclosure. Until the expiration of three (3) years following
the date of this Agreement, each party agrees, to keep confidential
and not disclose to any third party the terms of this Agreement and
any information received from the other parties, representatives or
advisors under this Agreement that is clearly labeled confidential.
This non-disclosure obligation shall not apply to any information
that was in the public domain prior to receipt or that becomes part
of the public domain other than by the receiving party's breach of
the provisions of this Agreement, was rightfully in the receiving
party's possession prior to receipt or is received from a third
party through no breach of any confidentiality obligation of the
receiving party. In addition, the parties may disclose
information to the extent required by the order of any court,
administrative agency or pursuant to any requirement of law or to
its employees, agents, and advisors to the extent reasonably
necessary to carry out the subject matter of this Agreement, with
the disclosing party taking all reasonable efforts to minimize the
scope of disclosure and to prevent further dissemination.
8. Return of Property. Following the termination of its engagement
hereunder, Consultant shall return to the Company on demand all
items of property belonging to the Company or any other affiliated
company or its or their customers or business associates which came
into its possession during its engagement hereunder, including (but
not limited to) lists of customers or clients, correspondence,
documents, computer diskettes or files or other material, whether
stored in written, electronic, digital or any other type of medium,
which may be in its possession or under its control. Consultant
shall refrain from removing or copying databases or commercial
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information of the Company which is not in the public domain, for
the purpose of their subsequent commercial use for the benefit of
any party or parties outside the Company without express consent and
approval to that effect having been obtained from the Company's
Board of Directors. Notwithstanding the above, Consultant shall be
entitled to keep and own any and all if its work product generated
during the term of this Agreement.
9. Termination. Notwithstanding the other provisions of this Agreement,
either party shall be entitled to terminate the engagement
established by this Agreement forthwith (but without prejudice to
the accrued rights and liabilities of either party hereunder and
Consultant's continuing obiigations under Section 7 or 8) with or
without cause at any time. If Company terminates this Agreement
without cause, Consultant shall be entitled to retain all if the
shares provided under Section 4 herein and shall be released from
any restrictions on the sale thereof as soon as legally permitted by
Rule 144, promulgated under the Securities Act of 1933 as amended
and the "Blue Sky" provisions.
10. Notices. Any notice in writing to be served hereunder may be given
personally to the Secretary of the Company or to Consultant or its
representative as the case may be or may be posted to the office
mentioned above of either party for the time being or may be posted
to either party at their last known address. Any such notice sent by
post shall be deemed served ten (10) calendar days after it is
posted and in providing such notice it shall be sufficient to prove
that the notice was properly addressed and put in the post. Notices
may also be delivered by confirmed facsimile transmission.
11. Merger of prior agreements. This Agreement takes effect in
substitution for all previous agreements and arrangements whether
written, oral or implied between the Company and Consultant relating
to Consultant's services and which agreements and arrangements shall
be deemed to have been terminated by mutual consent as from the
date of this Agreement.
12. Incorporation of Defined Terms. Capitalized terms not otherwise
defined herein shall have the meaning ascribed to them in the Merger
Agreement.
13. Miscellaneous. This Agreement shall be governed by the substantive
law of New Jersey and each party hereto (i) waives trial by jury,
(ii) submits to the jurisdiction of any court of general
jurisdiction located within the state of New Jersey, or the federal
district court resident therein, and (iii) waives any defense of
inconvenient forum.
14. Condition Subsequent. It shall be a condition subsequent to the
Company's and Contessa's obligations under this Agreement that the
Merger referred to in the recitals shall have been consummated
substantially in accordance with its terms. In the event that such
Merger is not so consummated, Company shall have no further
obligation hereunder except Company's obligations and agreements
under Sections 7, 9 and 13 shall survive and remain in full force
and effect and Consultant shall retain all rights to enforce such
obligations. Further, in the event of such Merger not being
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consummated, Consultant's obligations and agreements under Sections
7, 8, and 13 shall survive and remain in full force and effect, and
Company shall retain all rights to enforce such obligations.
IN WITNESS WHEREOF this Agreement of four (4) pages has been signed by or
on behalf of the parties hereto the day and year first before written.
FULLCOM, INC. CONTESSA CORPORATION
By: By:
---------------------------------- ----------------------------------
Name: Name:
--------------------------------- ---------------------------------
Title: Title:
-------------------------------- --------------------------------
/s/ Xxxxxxx Xxxxxxxxx
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Xxxxxxx Xxxxxxxxx
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consummated, Consultant's obligations and agreements under Sections
7, 8, and 13 shall survive and remain in full force and effect, and
Company shall retain all rights to enforce such obligations.
IN WITNESS WHEREOF this Agreement of four (4) pages has been signed by or
on behalf of the parties hereto the day and year first before written.
FULLCOM, INC. CONTESSA CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx By:
---------------------------------- ----------------------------------
Name: XXXXXXX X. XXXXXXX Name:
--------------------------------- ---------------------------------
Title: PRESIDENT Title:
-------------------------------- --------------------------------
/s/ Xxxxxxx Xxxxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxxxx
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consummated, Consultant's obligations and agreements under Sections
7, 8, and 13 shall survive and remain in full force and effect, and
Company shall retain all rights to enforce such obligations.
IN WITNESS WHEREOF this Agreement of four (4) pages has been signed by or
on behalf of the parties hereto the day and year first before written.
FULLCOM, INC. CONTESSA CORPORATION
By: By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------- ----------------------------------
Name: Name: Xxxxxxx Xxxxxxxxx
--------------------------------- ---------------------------------
Title: Title: Vice President
-------------------------------- --------------------------------
/s/ Xxxxxxx Xxxxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxxxx
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